“The downgrade reflects our assessment that a prolonged period of strong credit growth has increased China’s economic and financial risks,” S&P said in a statement, adding that the ratings outlook was stable.

S&P’s downgrade follows a similar demotion by Moody’s Investors Service in May and comes as the government grapples with the challenges of containing financial risks stemming from years of credit-fueled stimulus spurred by the need to meet official growth targets.

It also comes less than a month ahead of a highly sensitive twice-a-decade Communist Party Congress which will see a key leadership reshuffle.

A worker welds reinforcement bars at a site of a highway bridge under construction in Hefei, Anhui province, China September 21, 2017. REUTERS/Stringer